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Gold in a Cautious Recovery After Decline - Time to Get in Now?

ByFxPro Financial Services Ltd
AuthorAlexander Kuptsikevich
Published 11/29/2024, 07:26 AM
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Gold fell 4% at the start of the week due to the ceasefire between Lebanon and Israel but has since recovered around half of that fall. The price found support at $2,600 per troy ounce, which also provided support in late September and early October.

Gold fell 4% at the start of the week, but slowly recovering after

Technically, the sharp dip is an important signal that the bears are in control, having taken the price below the 50-day moving average shortly after attempting to consolidate higher.

However, confirmation will now be key. A further drop below $2,600 would make the area of this month's lows at $2,540 the short-term target for the sellers, with the market continuing to move towards $2,400. The long-term target, in this case, is the $2,000 an-ounce area.

The slow but steady rally from Tuesday to Friday suggests cautious buying, indicating continued interest even at current historically high levels. A weekly and monthly close above $2,670 could be a signal for further gains, marking a return to territory above the 50-day moving average. A further rally above $2,720 (previous highs) would dash hopes of forming a trend of lower local highs.

A weekly and monthly close above $2,670 could be a signal for further gains

In that case, the chances of a further attack on the historic highs will increase sharply, with a potential target of $3,400, representing a 22% increase from the previous highs and almost 28% from the current price.

For now, however, it makes more sense to move in small steps.

The FxPro Analyst Team

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